FEMA officials feed historical rainfall, stream staging (depth and pace of water flow) and other data into a computer model to project flood risk for locations across the country. Results are mapped into flood plains.

You may be okay with a 1-percent chance the property will flood in any given year, but lenders are not.

The 1-percent flood risk actually translates to a 26-percent chance the property will flood before a 30-year home loan is repaid. This is based on the theory of probability and common borrowing terms. The U.S. government does not allow federally insured lenders to make loans on properties in 100-year flood plains unless borrowers have flood insurance. In turn, you will need flood insurance as well as traditional homeowners insurance in order to get a loan on the house you are considering.

Floods are naturally occurring, financially devastating events that do not respect calendars or research statistics. Homeowners insurance does not cover flood-related property damage. Coverage is only available through a separate, stand-alone policy. Contact a homeowners insurance agent to learn more about flood insurance cost and coverage details. Keep in mind flood insurance policies have a 30-day waiting period before coverage begins.